NOTES TO FINANCIAL STATEMENTS by de443B3

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									NOTES TO FINANCIAL STATEMENTS

The notes that follow are designed to illustrate the minimum disclosures required for single-entry, cash basis fire
districts and are not in compliance with generally accepted accounting principles (GAAP). If your district reports on
a GAAP basis, refer to GAAP BARS for Cities and Counties and Special Purpose Districts for guidance.

DELETE NOTES THAT DO NOT APPLY AND ADD OTHERS THAT ARE NEEDED TO HELP A
READER UNDERSTAND THE DISTRICT’S FINANCIAL STATEMENTS.


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The (district) is a special purpose government that provides (e.g. fire protection services, etc.) to the general public
and is supported primarily through property taxes. The District was incorporated on (date) and operates under
Chapter 52 RCW and other laws of the state of Washington applicable to fire districts.
a.       Fund Accounting

         The accounts of the District are organized on the basis of funds, each of which is considered a separate
         accounting entity. Each fund is accounted for with a separate set of single-entry accounts that comprises its
         cash, investments, revenues and expenditures, as appropriate. The District's resources are allocated to and
         accounted for in individual funds depending on their intended purpose. The following are the fund types used
         by the District:

GOVERNMENTAL FUND TYPES:1

General (Current Expense) Fund

         This fund is the primary operating fund of the District. It accounts for all financial resources except those
         required or elected to be accounted for in another fund.

Special Revenue Funds

         These funds account for the proceeds of specific revenue source (other than for major capital projects) that
         are legally restricted to expenditures for specific purposes.

Debt Service Funds

         These funds account for the accumulation of resources to pay principal, interest and related costs on general
         long-term debt.

Capital Project Funds

         These funds account for financial resources that are designated for the acquisition or construction of general
         government capital projects.

Permanent Funds

         These funds account for resources that are legally restricted to the extent that only earnings, and not a
         principal, may be used for purposes supporting district’s programs – that is, for the benefit of the district or its
         citizenry.




1
    Eliminate labels and descriptions of any funds that your district does not use.



EFF DATE         SUPERSEDES                               FIRE DISTRICTS                                 PT CH PAGE
 01/01/08          01/01/04                                                                               4  2   4
FIDUCIARY FUND TYPES1:
       Fiduciary funds account for assets held by the District in a trustee capacity or as an agent on behalf of others.
Private-Purpose Trust Funds
       These funds account for all arrangements, under which the principal and income benefit individuals, private
       organizations, or other governments.
Agency Funds
       These funds are used to account assets that District holds for others in an agency capacity.
b.     Basis of Accounting
       The (district) reports financial activity using the revenue and expenditure classifications, statements and
       schedules contained in the Cash Basis Budgeting Accounting and Reporting System (BARS) manual. This
       basis of accounting and reporting is an other comprehensive basis of accounting (OCBOA) that is prescribed
       by the State Auditor’s Office under the authority of Washington State law, Chapter 43.09 RCW.
       Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in
       the financial statements. Revenues are recognized only when cash is received and expenditures are
       recognized when paid.
       Purchases of capital assets are expensed during the year of acquisition. There is no capitalization of capital
       assets, nor allocation of depreciation expense. Inventory is expensed when purchased.
c.     Cash
       It is the District’s policy to invest all temporary cash surpluses. The amount is included on the statement of
       resources and uses arising from cash transactions as cash and investments.
d.     Deposits
       The District’s deposits (and certificates of deposit) are covered by (the Federal Deposit Insurance Corporation
       and/or the Washington Public Deposit Protection Commission).
e.     Capital Assets

       Capital assets are long-lived assets of the District and are recorded as capital expenditures when purchased.
f.     Compensated Absences2
       Vacation pay may be accumulated up to ____ days and is payable upon separation or retirement.
       Sick leave may accumulate (indefinitely or up to ____ hours). Upon separation or retirement employees (do)
       (do not) receive payment for unused sick leave.
g.     Reserved Fund Balance3




1
     Eliminate labels and descriptions of any funds that your district does not use.
2
     Disclose district’s policy for sick leave termination benefits and district’s liability, if applicable. For example:
     (Sick leave can only be used for paid time off for the illness of the employee or a dependent. Upon
     resignation/termination, retirement or death, any outstanding sick leave is lost.)
     (If an employee terminates with at least ten years of service, he/she will be paid in cash for sick leave balances
     up to 30 days, at one-quarter his/her final pay rate. The District’s estimated liability for sick leave termination
     benefits on December 31, 20__ was $______________.)
3
      If the District has any external and/or internal restrictions on fund balance, it should describe the nature and
     amounts of these reservations.

EFF DATE        SUPERSEDES                              FIRE DISTRICTS                                PT CH PAGE
 01/01/11         01/01/10                                                                             4  2   5
NOTE 2 – COMPLIANCE AND ACCOUNTABILITY

There have been no material violations of finance-related legal or contractual provisions.1



NOTE 3 – PROPERTY TAX

The county treasurer acts as an agent to collect property tax levied in the county for all taxing authorities.
Collections are distributed (at/after) the end of each month.

Property tax revenues are recognized when cash is received by (district). Delinquent taxes are considered fully
collectible because a lien affixes to the property after taxes are levied.

The (district) regular levy2 for the year 20 for collection in 20 was $             per $1,000 on an assessed valuation
of $           for a total regular levy of $       .



NOTE 4 – INVESTMENTS

The (district’s) investments are held by the (county) as its agent in the District’s name.
Investments by type at December 31, 20 were as follows:

                               Type of Investment                           Balance
                               _______________                            $___________
                               _______________                             ___________
                               _______________                             ___________
                               _______________                             ___________
                               _______________                             ___________
                               _______________                             ___________

                                       Total                            $______________




1
    Disclose any material legal and contractual violations and steps taken to resolve them.
2
    If the district has any special levies (e.g., EMS, etc.), they should be disclosed separately. For example:

    (If 20 , the (district) levied also $        per $1,000 for (purpose) for total additional levy of $          .)




EFF DATE        SUPERSEDES                              FIRE DISTRICTS                                PT CH PAGE
 01/01/06         01/01/05                                                                             4  2   6
NOTE 5 - LONG-TERM DEBT

The accompanying Schedule of Long-Term Debt (09) provides a listing of the outstanding debt of the district and
summarizes the District’s debt transactions for year 20__. The debt service requirements, including interest, are as
follows:
                                            General
                                          Obligation                  Other                      Total
                                             Bonds                    Debt 1                     Debt

                    20___                 $                           $                          $
                    20___
                    20___
                    20___
                    20___
                            2
                  20 - 20

                   TOTALS                 $                           $                          $
(or)
As of December 31, 20__, the District had no debt.

NOTE 6 - PENSION PLANS

Substantially all of the (district’s) full-time and qualifying part-time employees participate in the (list the type(s) of
plan(s)) administered by the Department of Retirement Systems, under cost-sharing multiple-employer public
                                                   3
employee defined benefit retirement systems . Actuarial information is on a system-wide basis and is not
considered pertinent to the District’s financial statements. Contributions to the systems by both employee and
employer are based upon gross wages covered by plan benefits.

Historical trend or other information regarding each plan is presented in the state Department of Retirement Systems
annual financial report. A copy of this report may be obtained at:

                                Department of Retirement Systems
                                Communications Unit
                                PO Box 48380
                                Olympia WA 98504-8380

OTHER DISCLOSURES

Disclose any information that may be important to understand the district’s financial statements. (E.g., corrections
of material errors in previous year, risk management, extraordinary events, commitments, contingencies and
litigation, etc.)
1
       Type of debt may include capital leases, notes payable, etc.
2
       Use five-year increments thereafter.
3
       If the government administers its own pension system, include the following:

        Local Government Pension System

        The (district) is also the administrator of a pension retirement system called __________________. The
        system is shown as a trust fund in the financial statements of the (district). As of (date), there were a total of
        ____ individuals covered by this system of which ____ were currently still employed and ____ were drawing
        benefits.

        The most recent actuarial review of the system was done by (name of firm) to determine the funding
        requirements as of (date of actuarial study). As of this date, the market value of assets was $_______ and the
        actuarial present value of future benefits was $______ leaving an unfunded pension benefit obligation of
        $__________.

EFF DATE         SUPERSEDES                              FIRE DISTRICTS                                PT CH PAGE
 01/01/10          01/01/05                                                                             4  2   7
EFF DATE    SUPERSEDES   FIRE DISTRICTS   PT CH PAGE
 01/01/10     01/01/05                     4  2   7

								
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